Ashton Mining of Canada Inc - Street Wire
Ashton receives some northern encouragement
Ashton Mining of Canada Inc ACA
Shares issued 36,238,668 Oct 25 close $0.93
Thu 25 Oct 2001 Street Wire
Also Caledonia Mining Corp (CAL)
Also Northern Empire Minerals Ltd (NEM)
by Will Purcell
A northern diamond play is shining a bit brighter after Ashton Mining of
Canada Ltd. received some encouraging diamond counts from one of its recent
discoveries in Nunavut. As a result, Ashton's Potentilla kimberlite will
likely get a closer look next year with a larger sample, and the general
area should continue to heat up once exploration resumes early in the year.
As well, speculative interest in the area, located just south of the Arctic
coast, could get a further boost in the coming months, as a number of
diamond counts are still outstanding.
A total of 207.8 kilograms of Potentilla kimberlite contained 252 diamonds,
including 22 macros, but it was the diatreme phase of kimberlite that
seemed to provide most of the larger diamonds. A total of 129 kilograms of
diatreme kimberlite contained 175 stones, including 15 macrodiamonds.
Ultimately, it was not the sheer number of diamonds that provided the
encouragement. Rather, it was the number of larger macros that provided the
key reason for optimism. One of the diamonds was more than two millimetres
in length, and the stone may have weighed in excess of 0.02 carat. At least
two other diamonds were found that were more than one millimetre in length.
By comparison, nearly 80 kilograms of rock taken from the hypabyssal phase
of the kimberlite did not contain any one-millimetre stones. The largest
macro measured just 0.8 millimetre in length.
Curiously, the first diamond recovered in the immediate vicinity of
Potentilla was found in a till sample, not the drill core. That sample was
collected last year, and it yielded a diamond measuring 1.4 millimetres in
length, the first sign that there might be some larger diamonds to be found
nearby. Potentilla may not be a large kimberlite, but it could nevertheless
contain several million tonnes of kimberlite. The anomaly is about 140
metres long and 60 metres wide, and if it is a steep-walled pipe, it could
contain about five million tonnes of kimberlite to a depth of 350 metres.
More drilling will be required to determine the actual geometry of the
body, and the amount of kimberlite present.
Ashton also tested a second target in the immediate vicinity of Potentilla,
but the latest results do not appear to be particularly encouraging. Two
holes had been drilled into the feature, and Ashton initially said that it
had hit nearly 30 metres of altered mafic breccia in one of the holes and
encountered similar material in a second hole, which had to be abandoned
just after contact. The material was sent for petrographic analysis to
determine if it was kimberlitic in nature, but core from the two holes
revealed just narrow kimberlite dikes, with a number of kimberlite
stringers.
That was the bad news. The good news was that the material was unlikely to
be the source of a train of indicator minerals found in the area, which
leaves the door open for additional discoveries in the immediate vicinity
of Potentilla, which is arguably Ashton's best find in Canada's North. The
company has found nine kimberlites in Northern Canada through the years,
but none of them have produced diamond counts even close to those from
Potentilla, although larger samples from two of the finds did yield some
larger diamonds. Ashton recovered a 0.29-carat stone from a 1.17-tonne
sample of kimberlite taken from the Orion kimberlite, and seven diamonds
weighing a total of 0.174 carat were recovered from 2.4 tonnes of Cross
Lake kimberlite. Despite that, both kimberlites were written off as clearly
uneconomic, due to their low grades and modest microdiamond counts.
Although the diamond counts from Potentilla are encouraging, they are not
the best of the lot. The Anuri kimberlite, discovered by Kennecott Canada
and Tahera Corporation earlier this year, about 60 kilometres to the south,
would clearly seem to be the best kimberlite in the region, based on the
limited diamond counts available so far. In all, about 656 kilograms of
kimberlite have been extracted from Anuri, and a total of 907 diamonds have
been recovered from the rock, using a minimum screen size of 0.15
millimetre.
That worked out to about 1,400 diamonds per tonne, which was nothing
particularly worthy of excitement in itself. There were 337 macrodiamonds
recovered, or a little over 500 per tonne, and 61 of the diamonds met the
more stringent definition of a macrodiamond, as they were large enough not
to fall through a 0.5-millimetre mesh. In fact, nine diamonds were
sufficiently large enough not to fall through a one-millimetre mesh.
Of those, 337 diamonds were classified as macros, or just over 500 such
stones per tonne. A total of 61 diamonds were sufficiently large that they
did not pass through a 0.5-millimetre mesh, and nine stones did not fall
through a one-millimetre screen. That suggests that Anuri contains about
100 macros per tonne, using the more stringent criteria, and about 14
diamonds per tonne that would not fall through a one-millimetre screen.
That compares with the Potentilla sample, which contained about 50 macros
per tonne, including about 10 that would not fall through a one-millimetre
mesh.
Those larger diamonds would seem to suggest that Anuri might have a coarse
size distribution curve, and that was certainly borne out by the presence
of a large diamond in the cores. The big news from Anuri was the fact that
one of the larger macrodiamonds weighed a whopping 0.75 carat. That was the
largest diamond recovered in the region by far, and it indicates that some
of the kimberlites on the area have a chance of producing diamonds of
commercial interest. At first glance, the result from Potentilla pales in
comparison with the numbers produced by Anuri, but there is a great deal of
risk in placing too much emphasis on such small samples and the Ashton
results clearly indicate that more work is warranted.
The Potentilla kimberlite is located on the Kikerk Lake property, in which
Ashton is earning a 52.5-per-cent interest from Caledonia Mining
Corporation, which currently owns 70 per cent of the property. Northern
Empire Minerals Ltd. has a 30-per-cent share in the property, and the
company must pay its share of the exploration expenses or be diluted. As a
result, Ashton's president, Robert Boyd, said that his company would have
to discuss with Northern Empire what moves to take next.
As a result, there are no firm plans for the next stage of exploration on
the Kikerk property. Nevertheless, it does seem all but certain that Ashton
has definite plans to take a larger sample of kimberlite from Potentilla.
If Ashton is true to form, that next sample will be a small mini-bulk test,
perhaps involving up to 10 tonnes of kimberlite. Such a sample will provide
a much better picture of the diamond content of the kimberlite. Potentilla
is on dry ground, and Ashton will have several options as a result. In any
case, work on the ground will likely resume early next year, as the days
start getting longer.
As well, Ashton will likely keep searching for the source of the other
indicator mineral train in the vicinity of Potentilla. That is just the tip
of the iceberg for Ashton, as the company now believes that it has about 10
unexplained indicator mineral trains on its large land holding in the
region. As a result, it seems likely that Ashton will have one of its
busiest years in recent memory in the region.
Meanwhile there are a number of diamond counts still to come from the area,
and speculators are hopeful of more good news from the area. De Beers and
Rhonda Corporation sampled the Knife Lake pipe earlier this year, with
about nine tonnes of kimberlite being extracted from six holes. Some of
that material will be sent for microdiamond recovery, but the most of the
rock will be processed for macrodiamonds alone.
Last year, the Knife pipe produced just modest results. A total of 217
diamonds were recovered from 397 kilograms of kimberlite, and just nine of
the stones were macrodiamonds. On a brighter note, two of the diamonds
exceeded one millimetre in length, and both stones originated in one
20-kilogram sample taken from one of three drill holes. As a result, the
diamond content of Knife could be quite variable, a possibility that the
current program should shed some light on.
Tahera and Kennecott are still waiting for the diamond counts from their
Anuri East and Qamutiik kimberlites. Anuri East is located close to the
main Anuri body, and Qamutiik is about nine kilometres to the northwest of
Anuri, or roughly 50 kilometres to the south of Potentilla. As well, Ashton
and Pure Gold Minerals Inc. are still waiting for diamond counts from their
Artemisia kimberlite, which is located about 15 kilometres to the
west-northwest of Potentilla, on their Kim property.
Good numbers from any of the kimberlites would likely continue to drum up
interest in the area, but regardless of the results, the Nunavut diamond
play should have another busy year ahead of it, as there are a number of
pipes with encouraging diamond counts that will command a closer look, and
there are a significant number of unexplained indicator mineral trains that
should keep up an active hunt for new kimberlites.
With its fingers in many pies, Ashton shares have taken speculators for a
bit of a ride of late. The stock traded as high as $1.09 in March, but the
spring and summer saw Ashton shares drop steadily, dipping below the
50-cent mark in September. Since then, Ashton has mounted a bit of a rally,
helped along by some good news from Nunavut. Ashton gained 20 cents in
intraday trading Thursday, hitting a high of $1, before closing up 13
cents, at 93 cents.
The news was greeted with enthusiasm by Northern Empire shareholders as
well. The stock gained 10 cents in intraday trading, hitting a high of 25
cents, closing up six cents at 21 cents. Even Caledonia managed a brief
spurt, hitting an intraday high of 7.5 cents before closing up 1.5 cents,
at seven cents.
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